B.C. apartments also feeling the pinch of new tax

B.C. apartments also feeling the pinch of new tax

Parties and entities opposed to the B.C. government’s newly implemented 15 per cent property transfer tax have found unexpected allies: commercial property owners who have voiced concerns about the impact of the new levy on apartments.

“I don’t know that foreigners are speculating on our apartment blocks,” Fasken Martineau partner Edmond Luke told the Financial Post. “I don’t know if it was intended, but this act also applies to multi-family residential buildings like apartments.”

Foreigners are a minority in the apartment segment, with some observers estimating that only around 2 to 3 per cent of Vancouver apartments are purchased by overseas nationals.

Figures provided by CBRE Canada revealed that only $120 million has been spent by foreigners in procuring apartments in Canada in the first half of the year.

The new tax, which was intended to cool down the extremely bloated Vancouver housing market, applies to any parcel of land (and any improvements made to it) that is used for residential purposes.

Prior to the tax taking effect on August 2, residential realtors have struggled to move deals ahead of that date to avoid the tax. HQ Real Estate Services commercial broker Mark Goodman explained that such a step is far more difficult and unlikely in the commercial sector.

“There has been a lot of confusion in [the commercial] marketplace,” Goodman said.